For financial institutions, 2008 started with something of a bang only to end with a pained whimper. As the year came to a close, 25 banks had failed. Though most were small institutions, Seattle-based Washington Mutual's collapse was the largest bank failure in U.S. history. Some brethren of the failed banks avoided a similar fate by accepting government bailout funds or merging with a healthier institution. Comparatively, there were just three bank failures in 2007 and none between 2004 and 2007. The focus on credit markets and capital requirements meant a shift in compliance priorities even as bank staff had...
The new year won't be any easier on compliance officials at banks and money services businesses, and could get much harder depending on how U.S. officials implement new and proposed regulations, according to industry leaders.
Bank closings and enforcement actions for capital requirement and credit risk violations didn't preclude law enforcement and regulatory officials from pursuing banks for violating U.S. and international sanctions in 2009 or from leaning on financial institutions to catch tax cheats.
Regulators spent less face time addressing AML concerns as the lion's share of regulatory attention was devoted to subprime lending standards and the broader credit crisis. But, when financial regulators and the Justice Department weighed in, they did so heavily, assessing record penalties.